Sarojben G.Doshi, Ahmedabad V. The ACIT.,Cent.Circle-2(1), Ahmedabad

ITSSA 605/AHD/2010

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1803 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 13-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: S N DIVETIA
• Keywords: Principle of natural justice; Validity of assessment
• Section: 153A

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ IT(SS)A.NO.605/AHD/2010 [ASSTT.YEAR 2005-06] SAROJBEN G. DOSHI 26, SAMASTA BRAHMKSHATRIYA SOCIETY NARAYANANAGAR ROAD PALDI,AHMEDABAD. VS ACIT, CENT.CIR. 2( 1 ) AHMEDABAD. ./ IT(SS)A.NO.606 AND 607/AHD/2010 [ASSTT.YEAR 2004-05 AND 2005-06] GAURANG M. DOSHI 26, SAMASTA BRAHMKSHATRIYA SOCIETY NARAYANANAGAR ROAD PALDI,AHMEDABAD. VS ACIT, CENT.CIR.2(1) AHMEDABAD. ,- / (APPELLANT) ./ ,- / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVETIA, AR REVENUE BY : SHRI R.I. PATEL, CIT - DR / DATE OF HEARING : 27/04/2016 / DATE OF PRONOUNCEMENT: 02/05/2016 01/ O R D E R PER BENCH: THE LD.FIRST APPELLATE AUTHORITY HAS DISPOSED OF AP PEALS OF SMT.SAROJBEN G. DOSHI FOR THE ASSTT.YEARS 2000-01, 2004-05 TO 2006-07 VIDE ORDER DATED 17.5.2010. BEFORE US THE APPEAL F OR THE ASSTT.YEAR 2005-06 HAS BEEN LISTED FOR HEARING. SIMILARLY, IN THE CASE OF SHRI IT(SS)A NO.605 TO 607/AHD/2010 2 GAURANG M. DOSHI, THE LD.FIRST APPELLATE AUTHORITY HAS DECIDED THREE APPEALS FOR THE ASSTT.YEARS 2004-05 TO 2006-07 VIDE ORDER DATED 17.5.2010. THE APPEALS FOR THE ASSTT.YEARS 2004-05 AND 2005-06 ARE LISTED FOR HEARING. 2. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET, RAISED A PRELIMINARY ISSUE IN ALL THESE THREE APPEALS. HE C ONTENDED THAT THE ASSESSEE HAS CHALLENGED THE VALIDITY OF PROCEEDINGS INITIATED AGAINST THEM UNDER SECTION 153A OF THE INCOME TAX ACT. ACC ORDING TO THE LD.COUNSEL FOR THE ASSESSEE, THIS ISSUE HAS NOT BEE N ADJUDICATED BY THE LD.CIT(A) ON MERIT. HE FURTHER CONTENDED THAT THIS ISSUE REQUIRES TO BE ADJUDICATED AS PER THE LATEST DECISION OF THE HONB LE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. CONTINENTAL WAREHOU SING CORPORATION AND ALL-CARGO GLOBAL LOGISTIC LTD., 374 ITR 645. H E FURTHER RELIED UPON THE ORDER OF THE ITAT PASSED IN IT(SS)A.NO.55/ AHD/2011 IN THE CASE OF DILIP N. VYAS VS. DCIT. ACCORDING TO THE L D.COUNSEL FOR THE ASSESSEE, IN THAT CASE ALSO THE ASSESSEE HAS CHALL ENGED THE ASSESSMENT AND JURISDICTION UNDER SECTION 153A OF THE ACT FOR THE FIRST TIME BEFORE THE TRIBUNAL, AND THE TRIBUNAL AFTER TAKING NOTE OF DECISION OF THE HONBLE DELHI HIGH COURT SET ASIDE THE ISSUE TO THE FILE OF THE CIT(A) FOR ADJUDICATION. 3. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE LD.CIT(A). 4. ON DUE CONSIDERATIONS OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE FIND THAT THE STAND OF THE ASSESSEE IS THAT IF N O MATERIAL WAS FOUND DURING THE COURSE OF SEARCH EXHIBITING UNDISCLOSED INCOME, THEN, THE AO IT(SS)A NO.605 TO 607/AHD/2010 3 IS PRECLUDED TO ASSUME JURISDICTION UNDER SECTION 1 53A OF THE ACT. THE ASSESSEE HAS RAISED THIS PLEA BEFORE THE CIT(A) ALS O, AND THE LD.CIT(A) HAS RECORDED THE FOLLOWING FINDING: 7. BEFORE ME, DETAILED SUBMISSIONS WERE FILED ALON G WITH VOLUMINOUS PAPER BOOKS. THE FIRST GROUND OF APPEAL IN EACH OF THE APPEALS, CHALLENGES THE VALIDITY OF ASSESSMENT U/S 153 A. THE DETAILED CONTENTIONS IN THIS REGARD ARE GIVEN ALO NG WITH THE STATEMENT OF FACTS, APPENDED WITH THE APPEALS. THUS IT IS BROADLY SUBMITTED THAT PROVISIONS OF SECTION 153A ARE DISCR IMINATORY IN NATURE AND UNCONSTITUTIONAL OR ALTERNATIVELY THE SA ID PROVISIONS SHOULD BE INTERPRETED SO AS TO REMOVE THE DISCRIMIN ATION. FURTHER, THERE WAS NO REFERENCE TO THE SEIZED MATERIAL IN TH E ASSESSMENT ORDERS AND SO THE INITIATION OF PROCEEDINGS U/S 153 A WAS BAD IN LAW. 7.1 THE SUBMISSIONS, DETAILS ON RECORD, WERE CAREF ULLY CONSIDERED. IT IS SEEN THAT THAT THE CHALLENGE TO T HE VALIDITY OF THE ASSESSMENT ORDER(S) IS NOT ONLY MISPLACED BUT MISDI RECTED. THE APPELLANT HAS VAINLY ATTEMPTED TO YOKE TOGETHER THE HETEROGENEOUS CONCEPT OF THE CHAPTER XIV B WITH THE PROVISIONS OF SECTION 153 A.. FURTHER, NO SPECIFIC INSTANCE, OF ANY DENIAL OF NATURAL JUSTICE IS BROUGHT ON RECORD. MOREOVER, THIS IS NOT THE FORUM BEFORE WHICH THE LEGAL VALIDITY OF THE PROVISIONS OF THE ACT CAN BE CHALLENGED. THUS, THE RELATED GROUND OF APPEAL IS DISMISSED WIT HOUT FURTHER ELABORATION. 5. WE FIND THAT THE POSITION OF LAW WITH REGARD TO CONSTRUCTION OF MEANING AND SCOPE OF SECTION 153A, AT THE TIME WHEN THE LD.CIT(A) HAS DECIDED THE APPEAL WAS NOT CLEAR. THERE WERE NO DE CISIONS FROM THE HONBLE HIGH COURTS AT THAT STAGE. THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL-CARGO GLOBAL LOGIST IC LTD. (SUPRA) WAS DELIVERED IN THE YEAR 2012, AND THEREAFTER, A LARGE NUMBER OF DECISIONS AT THE END OF THE BOMBAY HIGH COURTS AS WELL DELHI HIG H COURT HAS COME IT(SS)A NO.605 TO 607/AHD/2010 4 OUT. THE LD.CIT(A) WAS NOT HAVING BENEFIT OF THESE DECISIONS IN ORDER TO DETERMINE WHETHER ANY SEIZED MATERIAL DISCLOSING TH E UNDISCLOSED INCOME UNEARTHED DURING THE COURSE OF SEARCH WAS NE CESSARY FOR TAKING PROCEEDINGS UNDER SECTION 153A OR NOT. THEREFORE, WE SET ASIDE THE FINDING OF THE LD.CIT(A) ON THIS ISSUE, AND RESTORE THIS ISSUE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IN ALL THESE THRE E YEARS. THE LD.FIRST APPELLATE AUTHORITY SHALL DECIDE THE ISSUE IN THE L IGHT OF THE JUDGMENTS OF THE HONBLE BOMBAY HIGH COURT AS WELL AS HONBLE DELHI HIGH COURT. IN CASE THE LD.CIT(A) ARRIVES AT A CONCLUSI ON THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, AND THE PROCEEDI NG INITIATED AGAINST THE ASSESSEE IN THESE THREE YEARS IS BAD IN LAW, TH EN, OBVIOUSLY, THE PROCEEDINGS WOULD BE DROPPED, BUT IN CASE THE ISSUE IS DECIDED AGAINST THE ASSESSEE, AND THE LD.CIT(A) UPHOLD THE VALIDITY OF NOTICE ISSUED UNDER SECTION 153A, IN THAT SITUATION, THE ASSESSEE S WILL BE AT LIBERTY TO CHALLENGE ALL THE ADDITIONS AGITATED BEFORE US, ON MERIT ALONG WITH FINDING OF THE LD.CIT(A) ON PRELIMINARY ISSUE BEFOR E THE TRIBUNAL IN THE SECOND ROUND OF APPEALS. WITH THE ABOVE OBSERVATIO NS, THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 2 ND MAY, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 02/05/2016